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Cycle to work scheme

0 replies

muddleduck · 10/12/2008 13:48

So I'm confused

I think I understand the scheme (which I signed up for last year) and that what happens is that I pay a series of installments which add up to the cost of the bike. These are deducted before tax/ni so is cheaper than me buying the bike in the normal way. It costs my employer nothing (apart from a bit of admin time) and all the money I save comes out of the tax man's pocket.

Why then do I have to pay a one-off fee at the end of the installments to my employer. I understand that this is a legal thing to stop it being a HP agreement and to make it clear that during the installments I am renting not buying the bike. But it seems unfair to me as why should my employer get a chunk of money for nothing? It is not a huge sum (5% of cost) but still.

Am I missing something?

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